Human Capital vs Social Capital
As we grow, we naturally acquire human capital—the hard skills gained from subjects like math and science. These skills help us perform tasks that give meaning, discover opportunities, and contribute to the environment we live in.
However, at some point, we encounter limitations in how these skills serve us.
For example, if you’ve learned algebra, it helps you understand numbers and how to add, subtract, multiply, etc. You might get an A in your class or exam, but as you progress, you see less emphasis on algebra in your daily tasks. Nobody asks you to solve X and Y equations at work.
So, you have to transition to a higher skill level—maybe by learning accounting, finance, or Excel. These tools may be much more relevant to what you need to do, whether it’s writing that report or ultimately getting paid.
But human capital isn’t enough—you cannot rely solely on it to scale your impact.
There is a limit to how many reports you can write in a day, how many Excel spreadsheets you can complete, or how many people you can teach. At this point, human capital becomes a constraint. It prevents you from making the greater impact you could achieve.
When this happens, you need to rely on another form of capital—social capital.
Social capital refers to the skills you learn from people or networks. These skills are harder to acquire but also more powerful because they create a two-way impact loop:
The first impact is from you to your network.
The second impact is from the network back to you.
In contrast to human capital—such as learning algebra—where you are the one who gains the benefit (not the algebra itself), social capital allows for mutual learning. When you learn from someone, they can also learn from you and benefit from your input.
Building social capital isn’t easy.
It requires constant effort, dedication, and soft skills in addition to the hard skills of human capital. These soft skills include:
Listening
Communication
Problem-solving
Empathy
You need to meet people, talk to them, ask questions, and understand their behaviors. This helps build relationships, which ultimately contribute to social capital.
Many people approach building social capital the wrong way, focusing on what they can get from their network rather than offering value first—or sometimes not offering value at all. If your primary goal is to take rather than give, you risk coming across as insincere, which can undermine the impact you could have.
To make social capital work, you need to start by giving—whether it’s sharing knowledge, ideas, goodwill, positivity, or even something as simple as a thank-you message. Letting people know you’re thinking of them is a small but meaningful gesture.
As you move through life, it’s important to shift your focus between building human capital (hard skills) and social capital (soft skills). Mastering both will make you more effective and valuable in the environment you live and work in.